We probably all know at least one negative story on IT outsourcing in healthcare from years past. But the outsourcing pendulum is swinging back. As core IT services become more of a commodity and CIOs need to focus on strategic initiatives, selective outsourcing is worth consideration.

The recent announcement that Trinity Health is outsourcing application management and rebadging approximately 450 staff is getting attention from other provider organizations. There are other examples – many in infrastructure.

More and more I hear from CIOs who are considering selective outsourcing for various reasons – reduce costs, modernize the infrastructure, provide scalability and flexibility as health systems grow, deal with recruiting and retention challenges, or focus on strategic initiatives instead of commodity services. Many CIOs are finding themselves part of overall cost reduction efforts at their health systems. While some CIOs start from a defensive posture and say they can’t possibly reduce costs any further, one of the most progressive IT leaders I know said she is looking at it as an opportunity to transform IT.

I was part of an organization wide cost reduction initiative when I served at Brigham and Women’s Hospital, Michigan Medicine and University Hospitals. As the CIO, I was asked to identify opportunities to reduce costs while other departments’ opportunities needed additional IT help to achieve their reductions. But saying no to cost reduction is usually not an option. CIOs must partner with their peers and engage their staff to identify opportunities. Continue reading →